Articles Tagged withtax appeal

Several years ago, our office published an article examining the subject of cumulative taxation. Under the Due Process Clause of the 14th Amendment, state taxes must not subject a taxpayer to an unfair cumulative tax burden. We reported about the landmark decision involved the Geoffrey Corporation, and the South Carolina regulation that left it subject to double taxation. In the matter of Container Corporation of America v. Franchise Tax Board 463 U.S. 159 (1983), the petitioner successfully persuaded the Court that double taxation is unconstitutional. In ruling in favor of the petitioner, the Court noted that “the principles enunciated in that case should be controlling here: a state tax is unconstitutional if it … creates a substantial risk of international multiple taxation…” Citing Japan Line, Ltd. v. County of Los Angeles, 441 U. S. 434 (1979).

With these cases in mind, we now need to revisit the rules regarding cumulative taxation as they may relate to Public Law 115-97 (Also known as the 2017 Tax Bill). In the wake of the revised tax code, some taxpayers are asking us why there was a need to revise the tax structure, which had ostensibly worked for more than 30 years. While avoiding partisan politics as much as possible, we explain that eight years of reckless government spending under the Obama administration has left our nation with an insurmountable amount of public and foreign debt. On the day that President Obama took office, the national debt was $10.6 Trillion. By the day President Obama left office, the national debt had increased by nearly 70% to $18 Trillion!

Unfortunately, we are all responsible for repaying this debt (along with interest). In an effort to reduce this debt, the Trump Administration and members of the legislature went to work on revising the Tax Code. The new tax bill contained several controversial provisions. One of the most unpopular aspects of the new Tax Code was a reduction to the corporate tax rate, which was inserted in order to ensure that American businesses would continue to thrive and keep Americans employed. We offer no opinion or prognostication as to whether this strategy will work. Rather, our focus in this article is only on the portion of the bill that relates to deductions for State and local taxes.

In 2018, many towns in Bergen County, New Jersey will undergo re-assessments. The municipalities affected include Carlstadt, Closter, Cresskill, East Rutherford, Hackensack, Hasbrouck Heights, Little Ferry, Moonachie, North Arlington, Oradell, Saddle Brook, South Hackensack, Teterboro, Westwood, and Woodcliff Lake. Additionally, the town of Saddle River will be conducting a revaluation. Revaluations and re-assessments differ only in that revaluations require the services of an outside company, whereas re-assessments are conducted by the assessor’s office. In both cases, however, the new assessments cause a great deal of confusion for some taxpayers, who mistakenly believe that the sudden increases in their assessments will result in a large increase in their tax bills. However, this notion is usually not correct.

Towns that have not been revalued or re-assessed in several years generally have assessments that are based on a small portion of their true market values. As a result of the under-assessments, the municipality annually increases its tax rates in order to satisfy the demands of the municipal budget. Due to the time and expense of conducting a revaluation, a town will generally wait several years before doing so. Then, when a revaluation or re-assessment occurs, one of the goals is to raise assessments up to close to 100% of the true market values of the properties. Consequently, the tax rates will drop commensurately so that, aside from some modest budget increases, the total tax revenue for the town is about the same as it was prior to the revaluation. Therefore, the average taxpayer will not experience any positive or negative effect from the revaluation.

Notwithstanding the arithmetic of the process, there are some taxpayers whose tax burden may change dramatically due to market trends in specific neighborhoods of a town that may result in the assessments of some properties increasing more than others. Therefore, while the net effect of a revaluation or re-assessment is ostensibly “tax neutral,” there will usually be a few taxpayers who will benefit from the revaluation or re-assessment while others are negatively impacted.

For the past 16 years, our office has been concentrating on just two areas of law – Evictions and Tax Appeals. Our eviction practice, which now spans most of New Jersey, has helped residential and commercial landlords with the removal of more than 10,000 tenants. Our tax appeal practice has been successful in the reductions of assessments by more than $67,000,000. With our county tax appeals concluding by July of each year, and the new assessments not being released yet, we have fielded numerous calls from our clients over the past 4 months, inquiring about tax appeals for 2018. The following information pertains to the release of new assessments and filing deadlines.

Monmouth County

We note that most municipalities in Monmouth County are still subject to the Assessment Demonstration Program (ADP), which often requires re-inspection of houses and buildings, and inevitably leads to yearly adjustments in assessments for the majority of Monmouth County residents. Therefore, even taxpayers who previously had their assessments reduced may find that their assessments for 2018 have been raised again. Accordingly, we have been advising all taxpayers affected by ADP to wait until their 2018 assessments are released before considering whether a Tax Appeal would be recommended. During the next few weeks, all Monmouth County residents should receive their new assessments for 2018. If you feel that your 2018 assessment exceeds the fair market value of your property, please contact us to discuss whether a tax appeal would be worthwhile pursuing. Please keep in mind that the Appeal Calendar for Monmouth County starts on November 18 and ends on January 17. Some towns, including Belmar and Spring Lake have received extensions until February 23. For information on any specific filing deadlines, please contact the Monmouth County Tax Board at (732) 431-7404.